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Market Review – Retail 4th Qtr 2012 January 17, 2013

Posted by Erik Swanson in Development, Research/Data, Retail News.
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The retail market improved in 2012 with positive absorption, some limited new construction, and a very strong investment climate for core assets. There has even been more interest in B and C quality retail investments.

In a nutshell the forecast is:

  • Vacancy Down
  • Construction – Up (slightly)
  • Rents – Flat (argh!)
  • Absorption – Up

Jeff Lyon, Kidder Mathews featured in NAIOP video December 5, 2011

Posted by Erik Swanson in Articles, Blogs, Development, Research/Data, Uncategorized, Video.
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KM’s CEO Jeff Lyon hosted NAIOPs 2011 Night of the Stars awards gala last month. Jeff’s appears in a short promotional video with some pretty cool animation featuring Kidder Mathews. You can check out the video here.  

Here are the 2011 NAIOP WINNERS with some links below:  

Public Project of the Year: UW Foster School of Business – Paccar Hall

Public Project of the Year: Pike Place Market Renovation

Community Impact of the Year: Compass Veterans Center

Hospitality Development of the Year: The Alaska Building – Marriott Hotel

Private Education Development of the Year: Seattle University – Lemieux Library & Expansion and Renovation

Technology/Life Sciences (Non-Public) Development of the Year: Swedish Issaquah Hospital and Medical Center

Redevelopment/Renovation of the Year: Terry Avenue Building

Commercial Interior of the Year: Nuance Communications

Multi-Family Development of the Year: LINK Apartments

Mixed Use Development of the Year: The Landing – Renton

Industrial Development of the Year: Harbor Wholesale Grocery Headquarters: Warehouse and Distribution Center at Hawks Prairie 111 Corporate Park

Office Development of the Year: Bill & Melinda Gates Foundation Campus

Market Adaptation of the Year: Stadium Nissan of Seattle

Deal of the Year: Seventh & Madison Building – Polyclinic

Developer of the Year: Vulcan Real Estate

SIOR Industrial Broker of the Year: Wilma Warshak

SIOR Office Broker of the Year: Jesse Ottele

SIOR Investment Sales Broker of the Year: Jon Hallgrimson

Weekend Reading – Happy 4th! July 1, 2011

Posted by Erik Swanson in Articles, Blogs, Development, Puget Sound Investment Review, Research/Data, Retail News, Video.
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We’ve blogged recently about the improvements in lending conditions in for CRE. It appears that we’ll see more banks with available capital to lend on CRE. With loss provisions falling for the sixth straight quarter, banks are freeing up dollars for new loans. In addition, foreclosures have increased while the total amount of delinquent balances (delinquencies, foreclosures, and restructured loans) has decreased. Costar digs into the numbers in a recent article:  LESS DISTRESS: CRE Taking Less of Toll on Nations’ Banks .

New Kind of Mall?  – A quick article from RetailTrafficmag.com discusses a Czech developers mall concept that caters specifically to men. Check out the property’s Facebook page here.  I don’t read Czech, but judging by the photos he might be onto something. Over the holiday weekend, I’ll be putting together my wish list of retail categories and potential tenants…Developer and equity partner wanted.

Technology has changed the way we experience media, shop, and communicate with each other. Increasingly, it is at the expense of retailers and shopping center owners that lease to them. Now, some bricks and mortar retailers are fighting back. Retailers have begun to utilize technology to improve the physical shopping experience and increase sales both online and at the store. Check out 7 Innovative Ways the IPAD is Used in Retail – Mashable.com . And check out this video: Korean Grocery Store uses Clever Marketing Campaign –Wimp.com

Have a very happy and safe Independence Day!

Loja Real Estate Acquires Lakeland Town Center June 24, 2011

Posted by Erik Swanson in Articles, Development, Research/Data, Retail News, Retail Sales Comps, Sale.
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Last week Loja Real Estate of Walnut Creek, CA purchased the Lakeland Town Center from Investco of Sumner. The transaction closed on June 17, 2011 with a sale price of $39.4 million – approximately $300 per square foot. The cap rate was not disclosed but sources tell us that it was “in the low 6 cap” range.

Source: Tarragon

The Lakeland Town Center is a 132,000 square foot grocery-anchored shopping center sitting on 12.4 acres. The center was built by Investco affiliate Tarragon in 2002. The center is anchored by a 67,000 square foot TOP Food & Drug and includes other quality tenants such as Blockbuster, Starbucks, The Rock Brick Oven Pizza and Brewery and McDonald’s. 

Loja Real Estate, LLC, is a wholly owned subsidiary of The Loja Group LLC,  a women-owned real estate investment management firm with $135 million in assets under management. This is their first purchase in Washington and their third outside California.

More evidence of the appetite for strong grocery anchored centers and proof that sellers in our region will continue to reap the benefits of a supply constrained market.

Cabela’s coming to the Tulalip June 6, 2011

Posted by Erik Swanson in Articles, Development, Retail News, Uncategorized.
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An already a vibrant retail market will become even busier next year. Nebraska based Cabela’s is planning to build a 110,000 square foot store at the Quil Ceda Village on the Tulalip Tribes Reservation near Marysville. The huge themed hunting and fishing store will join nearby retailers Wal Mart, Home Depot, the 110 store Seattle Premium Outlet Center and the tribal operated 370 room, Tulalip Resort Casino.

The building’s exterior will reflect Cabela’s traditional store model with log construction, stonework, wood siding and metal roofing. The inside will highlight the company’s next-generation layout, which is designed to immerse customers in the outdoor experience and includes conservation-themed wildlife displays and trophy animal mounts. Construction is expected to start later this year. – Cabela’s Press Release

Construction will begin this year and the store will open in 2012. Cabela’s operates 33 stores throughout the USA and Canada and this will be the second Washington store after Lacey opened in 2007.  They recently opened a store in Springfield, Oregon and have 3 more planned for this year.  The Tulalip reservation is 22,000 acres located north of Everett and west of Marysville, Washington.

Optimism at ICSC Retail Convention May 25, 2011

Posted by Erik Swanson in Articles, Blogs, Development, Retail News.
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We’ve just returned from Las Vegas where we, and roughly 35,000 others, attended the ICSC Global Retail Real Estate Convention or “RECon”.  The mood was upbeat and energetic and we were pleasantly surprised with the level of activity. We had a busy schedule packed three days with meetings, parties, and dinners that included prospective buyers, developers and property owners large and small.  The consensus; while it’s not a normal deal making environment, there’s a cautious optimism that things will continue to improve in the retail real estate retail sector.  A couple of takeaways from the convention:

  • Secondary markets will see increased capital as investors seek yield. See Shopping Center Today News RECon recap here.
  • Retailers will speed up expansion through 2012. See GlobeSt.com’s report from RECon here.
  • Institutional buyers awash in cash will continue to compete for Class A properties keeping cap rates low for quality product.
  • Redeployment of capital – Many owners are contemplating selling now before cap rates increase with looming inflation.
  • Tenants still have plenty of leverage and benefit of choice. See the RetailTrafficmag.com article:  Landords, Tenants Jockey For Position in Lease Negotiations.

Weekend Reading List March 25, 2011

Posted by Erik Swanson in Articles, Blogs, Development, Research/Data, Retail News.
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Investors Returning to Retail Single by Single Building – Costar – The byline says, “Stand-Alone Retail Properties Generating Renewed Interest from Investors– Hinting at Broader Recovery To Come”. The 1st paragraph of this article states the prospects for retail investments look better than they have in years. After I read that I stopped reading…

Foreign Capital Fuels US Markets – CCIM – Overseas buyer interest from life insurance companies and private equity firms is bolstering competition for investment properties. With supply constrained in core markets investors are now moving into secondary markets.

by the end of the year, Seattle, San Diego, Atlanta, and Houston will be added to the mix for strategic purchases – Garrick Brown, research director, ChainLinks Retail Advisors

Top Retail Markets for 2011 – Chain Store Age – retailer demand for Seattle makes it a top ten market.

Five Guys Burgers Gets $100 million in Expansion Capital – 4-traders.com – Five Guys is a “fast casual” hamburger chain that has opened more than 375 restaurants in the past three years. Today there are more than 640 franchised locations and more than 100 corporate-owned locations across the U.S. and Canada. Supersize ’em. 

Local Retailer News… March 22, 2011

Posted by Erik Swanson in Articles, Development, Research/Data, Retail News, Uncategorized.
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Pizza…Local restauranteurs’ Don Bellis and Jay Gigandet plan a national expansion of their local chain  The Rock Woodfired Pizza & Spirits.  Bellis says he would like to open 30 restaurants over the next seven years in the U.S. including locations in Philadelphia, Texas and the Carolinas. Bellis also has partnered with Kaizon Brands in Canada who will master develop up to 40 stores by 2020.  The Rock started in Tacoma in 1995 and has grown to 9 locations in the Puget Sound and 2 in Canada.   Check out the DJC article here.  

BooksBorders Books announced the closure of an another 28 stores as part of their Chapter 11 bankruptcy reorganization.  Locally, stores in Federal Way and Tacoma will likely close by the end of May 2011. In the end, Borders will close 228 stores, leaving roughly 400 operating in the US.

Liquor sales…A new initiative to privatize state liquor sales with the Secretary of State last week.  According to the initiative the state would be required to auction off its rights to operate liquor stores. The state would also be required to sell any assets including state-owned liquor stores and the state distribution center. More info from the Seattle Times here.  Although last years initiatives to privatize sales failed, this may be one to keep an eye on.

 

Parent company of Bravern’s DavidBartonGym files Chapter 11 March 9, 2011

Posted by Erik Swanson in Articles, Blogs, Development, Retail News.
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The parent company of  upscale fitness center DavidBartonGym is seeking Chapter 11 bankruptcy protection in New York.  Their location at Bellevue’s Bravern mixed-use center will, for now, stay open as it attempts to restructure roughly $65 million debt. Besides three New York locations, DBG also has locations in Chicago, and Miami. David Barton’s revenue last year totaled over $28 million, which was a significant increase over 2009. However, the company racked up debt of $65.5 million during its expansion through 2009 which was mostly accrued from their extravagant tenant improvements and high rents. Looking at DBG’s website it’s easy to see why…   More information from PSBJ here.

Retailers plan expansion in 2011 March 1, 2011

Posted by Erik Swanson in Articles, Development, Research/Data, Retail News.
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According to ChainLinks Retail Advisors , nearly every region in the country will see an increase in retailer expansion this year. In their just released National Retailer and Restaurant Expansion Guide, ChainLinks details the expansion plans for over 400 of the largest chains in the country.  Plans for some of the more notable retailers include 7-Eleven (as many as 350 new stores), Apple (at least 50 new stores)  and Wal-Mart (over 400 stores throughout the US in the next 30 months). On the food side, the news is equally encouraging. Companies like Five Guys Burgers, Denny’s, Starbucks, Panda Express are among a long list of restaurants looking to grow units significantly over the next year.

…the current surge demonstrates to us two key factors; the return of optimism within the retail sector, and the desire to expand quickly now-while rents are still low.     -Garrick Brown, ChainLinks Retail Advisors 

Costar provides a more detailed list here.